October 1996

On the back burner no more

A Wisconsin community recently reclaimed a part of itself after a long struggle with hazardous waste. Other towns and cities can do the same.

Greg Matthews

There are few things sadder than an old, abandoned factory. Each broken window, every crumbling brick points to an industry taken unawares by progress, to a product now obsolete, perhaps even to mismanagement and outright neglect. Empty buildings stand as forlorn reminders of jobs lost, of families coping with diminished incomes, of communities sapped of economic vitality.

Cities and towns dealing with old industrial sites often find they've been bequeathed an additional unfortunate legacy: pollution. The wastes from antiquated manufacturing processes linger on, remnants of a not-so-long-ago time when the hazards of untreated waste materials were unknown and the necessity of environmental regulation was still a matter of debate.

So it was an occasion for much rejoicing in August 1995 when a large group of business and government officials gathered to break ground on a new 31,000-square-foot grocery store at the former location of Malleable Iron Range Co., just north of downtown Beaver Dam.

"It's been a long and very strange trip at times," said former Beaver Dam mayor Steven Sabatke, referring to the site's convoluted ten-year journey from abandonment to renewal. Dave Edwards, DNR hazardous waste investigator based at Horicon, agreed: "I always tell people this has been the most frustrating yet most rewarding case I have worked on in my 17-year career," he said. "It seems like there's no end of legal tangles and financial hassles when a corporation goes under and leaves a mess for the Department to sort out and the taxpayers to pay for, but it is gratifying to finally see a site restored to usefulness for a community."

Leaving no stove unturned

Beaver Dam's route to urban renewal began with a disturbing announcement in the spring of 1985: The Malleable Iron Range Co., a fixture in the city for almost 100 years, filed for reorganization under Chapter XI of the federal bankruptcy code.

Since 1896 the company had produced quality home appliances under the Monarch label at the foundry located near the center of town. Company employees, many of whom lived across the street or down the block, had cast, electroplated, painted and enameled the stoves, grills, heaters and fireplace inserts that had made Monarch a household name. By the mid-1950s nearly 1,200 workers kept the production lines moving at the plant.

Three decades later, Malleable was bankrupt, pushed into decline by the difficult economic climate of the early 1980s. Malleable's assets, excluding buildings, were sold to the Monarch Appliance and Fabricating Co. (MAFCO), and all usable items were moved to Monarch's Algoma facility.

"What remained at Beaver Dam was trouble," said Edwards. He conducted an inspection at the plant and discovered 500 barrels of toxic and hazardous wastes, 65,000 gallons of dangerous materials, including flammable paint thinner, stripper waste, electroplating solutions, lab chemicals, porcelain enamel waste with high concentrations of heavy metals – and an assortment of barrels "containing who knows what."

By now, the Malleable Iron Range Co. existed only on paper, but the hazardous waste and the threat that waste posed to the community was real. In bankruptcy court, the Wisconsin Attorney General represented the state's interest in a full cleanup of the site. But Monarch was powerless to start removing hazardous waste on its own – all its corporate assets were tied-up pending review of a creditor's committee, and only court approval could release funds.

Lacking the resources to hire security guards, Monarch left the 13-acre complex of mostly dilapidated buildings unattended. The buildings were broken into at night and on weekends despite the best efforts of the Beaver Dam police and fire departments. Residents feared fires or accidents would occur at the site.

The problems were just beginning

With most of the hazardous waste still on-site by 1987, the U.S. Environmental Protection Agency (EPA) was called in to help. EPA used $369,000 from the Superfund program to pay for removing wastes during the summer of '87. By law Monarch was required to cover the full cost of the cleanup, but the bankrupt company didn't have the cash. Eventually $151,000 was taken from the company's assets to partially reimburse EPA.

During 1988, Dodge County took over ownership of the site. The county and the city formed a committee to decide what to do with the buildings and lot. "We recognized right away that we [the county] couldn't get out of our responsibilities, so we took a proactive stance," explained Chuck Swain, then and now chair of the Dodge County Board. "It put everyone in the proper frame of mind to begin tackling the many problems."

Many they were. Buildings in poor condition needed to be razed – an expensive task, given the asbestos pipe insulation that had to be removed before the structures could be demolished. A closer examination of the site revealed underground petroleum and chemical storage tanks had polluted groundwater and soils.

"The place was an eyesore and a danger," said Swain. "Kids were running through it. We recognized the potential for disaster." The Beaver Dam Fire Department and other area fire departments held drills on the property so each squad would know exactly where to go in case a blaze broke out.

The worst-case scenario came to pass in the early-morning hours of February 16, 1990. As flames set by an arsonist engulfed the buildings, the lean-to structures collapsed "like a deck of cards," said then Fire Chief Peter Westra.

Officials made an on-the-spot decision to raze some of the surrounding structures, hoping to contain the blaze by creating a fire break. It worked, but they then faced the task of demolishing all buildings on the property. The effort cost the county $359,000.

Rising from the ashes

However disastrous at the time, the fire ultimately sparked some good. Said Swain: "It really got the ball rolling to finish cleaning up the site." In late 1991 the Hoffman Corp. of Appleton approached the county with a proposal for developing the site. The county and city made commitments to address all environmental concerns and public improvements associated with the property.

During the next several years, Dodge County hired an environmental consulting firm; submitted a site assessment to DNR; installed a system for dealing with petroleum contamination; cleaned up and disposed of contaminated soils; and put together a remedial action plan for removing non-petroleum products from groundwater. The effort cost the county nearly $1.5 million. The city of Beaver Dam created a Tax Incremental Finance (TIF) District in September 1994 to help spur development on the property, and contributed $350,000 toward environmental clean-up costs.

The state provided some financial assistance as well. Dodge County received $657,000 from the state PECFA fund to clean up groundwater pollution caused by underground tanks. And the state Department of Development awarded Beaver Dam a $350,000 block grant for improvements, including street, sewer and water utilities, engineering and site work.

Clean-up costs for the entire property totaled $2.6 million. Despite the high price tag, former Beaver Dam mayor Steve Sabatke says it has been "a huge success story highlighted by the textbook cooperation between the city, county and state." Today, Recheck's Food Mart stands on the former Malleable grounds and employs 35 area residents. An adjacent strip mall is under construction and will soon house a video store, restaurant and other businesses.

It's been a long and at times painfully slow process from the bankruptcy to the ultimate redevelopment of the property. "Folks around here have seen Malleable thrive, then dissolve; MAFCO move in, then leave," said Edwards. "They've seen the empty buildings, the vandalism, the removal of thousands of gallons of hazardous waste, the fire, the soil and groundwater clean-up – and now, new businesses. You could say we've come full circle."

Edwards credited the county and city officials who looked beyond the seemingly insurmountable environmental problems to envision the revitalization of the site. DNR hydrogeologist Mark Putra concurred: "The effort put forth by Dodge County and the City of Beaver Dam made our job much easier." Putra cited the Monarch site as a prime example of the Brownsfield Initiative.

"The problem Beaver Dam faced is pretty common," said DNR Secretary George Meyer, who toured the site just after the grocery store opened in May 1996. "What's unique is how that problem has been turned around. This is clearly a model for the rest of the state."

Said Edwards, with admiration – and relief: "They have truly made a silk purse out of a sow's ear."

Greg Matthews is the public information officer for DNR's Southern Region.

Community recovery with less risk

Cara Norland, DNR Land Recycling Program

The decline of our urban and rural economic centers is both a statewide and national concern. As the suburban fringe expands and prospers economically, many properties in downtown areas have been abandoned. Left behind are residues from the ways we conducted business, bankrupt dreams and environmental contamination. These so-called "brownfields" become pockets of urban decay – run-down properties that can turn healthy neighborhoods into wastelands.

Brownfields like the Malleable/Monarch property in Beaver Dam represent a tremendous opportunity for industry and communities. Unlike undeveloped sites, or "greenfields," brownfields are already located close to a work force and established services, such as roads, public transportation and utilities. These lands could be accessible and attractive to buyers. Communities, however, often do not have the resources to determine if abandoned, tax delinquent or bankrupt properties are contaminated. As the Malleable/Monarch experience has shown, with the right blend of public and private cooperation and funding, brownfields can once again become productive profit centers within communities.

To meet this challenge, the Land Recycling Law of 1994 reduces a community's risk and encourages people to buy contaminated properties, clean them up, and put them back to productive use.

Good for the buyer

In the past, one of the main barriers to purchasing and reusing contaminated properties was the risk that purchasers and investors would assume unlimited liability to clean up pollution caused by others. The Land Recycling Law exempts purchasers or "innocent landowners" from future liability if they investigate and clean up polluted property to existing Wisconsin standards. When known pollution is cleaned up, the new owner can develop the site while the public pays future costs for restoring spills that occurred before the purchaser acquired the land.

Good for the community

Abandoned and tax delinquent properties often sit unused because no one will acknowledge ownership. Until someone is available to act as the seller, future development is virtually impossible. The Land Recycling Law provides incentives that encourage municipalities to take title to such properties and start the redevelopment process. The law helps communities act as brokers to assure prospective purchasers they will be free from investigation and cleanup liabilities.

Good for lenders

Lenders have been reluctant to repossess or invest in properties, fearing they would have to assume financial liability for cleaning up contaminated sites. The state law provides some relief to lenders who foreclose or provide business loans to those owning brownfields.

For recorded information on the Land Recycling Program, to order publications or have your name placed on a Land Recycling mailing list, call 1-800-367-6076 (in-state calls outside of the Madison metropolitan area) or (608) 264-6020 (Madison callers and out-of-state inquiries).